Enacted 2012 • Launched 2012 • Tax-Credit Scholarship
Louisiana taxpayers can receive tax credits for donations they make to School Tuition
Organizations (STOs), nonprofits that provide private school scholarships. There is no cap on
available tax credits.
- Students participating: n/a
- Schools participating: n/a
- Scholarship organizations: n/a
- Average scholarship value: n/a
Maximum scholarship value as a percentage of
Louisiana’s total per-student spending ($10,701)
For students in grades K-8, scholarships can be worth up to 80 percent of the state average
“Minimum Foundation Program” funding per pupil for the previous year. For grades 9-12,
scholarships can be worth up to 90 percent of that same figure.
Students must come from families in which their household income is less than 250 percent of
the federal poverty line ($57,625 for a family of four in 2013). Also, to qualify, they either must
be entering kindergarten, have attended a public school during the previous school year, or be
a previous scholarship recipient.
No legal challenges have been filed against the program.
Rules & Regulations
Any rebate can be claimed only when the relevant school tuition organization certifies to the Department of Education that the taxpayer’s donation was used to fund a scholarship.
No more than five percent of donations can be used by school tuition organizations for administrative purposes; at least 95 percent has to be distributed as scholarships. School tuition organizations must be 501(c)(3) organizations under federal tax law, and cannot limit scholarships to one private school. A school tuition organization also must do all of the following: notify the Department of Education of its intent to provide scholarships; document its 501(c)(3) eligibility; document the eligibility of each student who receives a scholarship; provide scholarships on a first-come first-served basis, except that previous recipients can get priority; issue checks to parents, who are required to endorse the check over to a qualified private school; certify to the Department of Education all taxpayers whose donations were used, the amounts, and which scholarships were issued; perform criminal background checks on all employees and board members; ensure that scholarships are portable to all qualified private schools; provide a public audit from a CPA each year; annually produce a financial information report that complies with uniform financial accounting standards.
Eligible private schools must be approved by the state Board of Elementary and Secondary Education, and must comply with the criteria of the federal case Brumfield v. Dodd, 425 F. Supp. 528 (E.D. La. 1976).
In that historic case, a federal court held that state assistance could not be provided to private schools that were set up in a racially discriminatory manner to avoid desegregation orders. If any plaintiff comes forth with a plausible case of racial discrimination, the private school should show “affirmative steps instituted by the school to insure [sic] the availability of all of its programs to blacks who may choose to participate,” such as “active and vigorous recruitment programs to secure black students or teachers, including student grants-in-aid, proof of continued, meaningful public advertisements stressing the school's open admissions policy, proof of communication to black groups and black leaders within the community of the school’s nondiscriminatory practices, and similar evidence calculated to convince one that the doors of the private school are indeed open to students of both the black and white races upon the same standards of admission."
Private schools must do all of the following: conduct criminal background checks, administer state and district accountability tests annually to all participating students, and provide parents with a copy of test results. If a school gets more than $50,000 in scholarships, it must demonstrate financial viability by (if less than five-years-old) filing a surety bond in an amount equal to the aggregate amount of donations expected or by filing appropriate “financial information” with the school tuition organization.
The Department of Education can conduct financial reviews or audits of school tuition organizations, and shall bar the organization from participating if it intentionally and substantially violates the rules.
Louisiana Revised Statutes, Title 47, § 6301.
Robbie Rhinesmith | email@example.com